EDITORIAL: Rudds razor gang should steer clear of diesel grant

By: Jason Whittaker

It seems almost unthinkable a new Government would consider scrapping the diesel grant to trucking operators in a time of

It seems almost unthinkable a new Government would consider scrapping the diesel grant to trucking operators in a time of record-high pump prices.

But the trucking industry is running scared of Kevin Rudd's razor gang and his vow to tighten the Government's belt. There's genuine concern the Government could look to wind back the on-road 18.51 cent per litre grant that's been a lifeline to many fleet owners.

The arguments against rolling back the grant, or at least amending the conditions for applying, seem self-explanatory. But in case Wayne 'the Axe' Swan is crunching the numbers, let's go through them.

Trucking operators, most of them small businesses, many of them on marginal profitability, are struggling to pass on fuel costs that are eating more and more into running budgets. Removing the grant would be a double blow and seriously impact the viability of many carriers and the competitiveness of the trucking industry.

Amending the current environmental criteria for pre-1996 trucks, which allows operators to claim the grant under maintenance management programs like TruckSafe, would also cut deep in the trucking community. Almost 60 percent of the nation's fleet is made up of pre-1996 vehicles.

And scrapping the grant goes against the very motivation behind Rudd's fiscal frugalness — to put a lid on bubbling inflationary pressures. According to the Australian Trucking Association (ATA), adding cost to the transport chain could in fact put more pressure on inflation.

According to the ATA's pre-Budget submission, which wards Rudd's razor gang away from the trucking industry, any cut to the fuel grant will push truck operating costs as much as 22 percent higher, while grocery bills will increase by $86 for urban families and more than $100 for rural households.

"I think when governments make statements about reducing expenditure we need to ensure the Government understands the importance of fuel taxes and the fuel tax credit system because it is very important to our industry," ATA Chief Executive Stuart St Clair says.

In fact, the original diesel grant was never intended to extend beyond 2010. Ever since its introduction, the future of the scheme has been at the whim of politicians and short-term extensions.

Any review of the scheme should consider running costs holistically, including new road user hikes the Rudd Government seems certain to support, and the real impact of any rise in operating costs on the industry and the economy. There are plenty who support a fuel-based user charge as the fairest way for operators to pay their way.

In the meantime, the Government must lock in the current grant for all compliant operators. Simply, the razor gang should back off.

What do you think? Send us your feedback.

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